By Atul Prakash and Alistair Smout
LONDON (Reuters) - The FTSE 100 resumed its slump on Wednesday after recovering the day before, led down by stocks exposed to turbulent emerging markets.
Financials and consumer staples, which have high global exposure, were among the top decliners in the blue-chip FTSE 100 index (FTSE), which was down 0.8 percent at 6,284.72 points at 11:40 a.m..
Russian assets were volatile again as the finance ministry battled to defend the rouble. The currency has crashed to record lows, hurt by international sanctions and a nearly 50 percent decline in crude oil prices
Weakness in Russia has spread to other emerging markets, with the South African rand
"With the Russian rouble and oil getting smashed, people want to cut some risk from the table going into 2015. The sharp sell-off is sentiment-related," said Mike Jarman, chief market strategist at H2O Markets.
Although few stocks on the FTSE 100 have substantial exposure to Russia, South African paper maker Mondi (L:MNDI) fell 3.9 percent, the biggest decliner in the FTSE 100. Asia-focussed bank HSBC (L:HSBA) dropped 1.8 percent to take the most points off the index.
"The emerging markets are a concern at the moment, and we're seeing money coming out of anyone with exposure to those parts of the world," Manoj Ladwa, head of trading at TJM Partners, said.
Oil companies held roughly steady. Although Brent fell below $60 dollars again on Wednesday, it was off its Tuesday lows.
However, Petrofac (L:PFC) fell 3.3 percent after a downgrade to "neutral" from "buy" by Citi. The energy-services company is now down about 45 percent this year as the slump in oil raises the prospect major oil companies will cut spending on services.
Dixons Carphone (L:DC) bucked the trend, rising 4.2 percent. The electricals and telecommunications retailer posted a 30 percent increase in first-half profit on the back of gains in market share and said it was on track to meet expectations for the full year.
"They seem to be discounting quite heavily, so margins could come under pressure. If they can deliver moving into 2015, that will encourage the market further," said Zeg Choudhry, managing director at LONTRAD.
(Editing by Larry King)